Upbeat U.S. growth revision drives Wall Street higher

NEW YORK (Reuters) - U.S. stocks rose on Wednesday after stronger-than-expected U.S. economic growth outweighed concerns about escalating tensions between the United States and North Korea and uncertainty in the aftermath of Hurricane Harvey.

A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, U.S., December 28, 2016. REUTERS/Andrew Kelly/File Photo

Gross domestic product was revised higher to show a 3.0 percent annual growth rate in the second quarter, due partly to robust consumer spending as well as strong business investment.

Adding to the positive sentiment, U.S. private-sector employers beat economists’ expectations as they hired 237,000 workers in August, marking the biggest monthly increase in five months.

“I have doubts how sustainable the macro economy is, but perceived fundamentals are still okay. GDP confirmed that,” said John Velis, macro strategist at State Street Global Markets in Boston.

“You can come up with plenty excuses to remain (invested) in the market.”

President Donald Trump said he wants to see the U.S. corporate tax rate drop to 15 percent but the White House offered no new tax plan, leaving the proposal in the hands of Congress. Tax reform was one of Trump’s main talking points during his campaign and expectations for its passage have been a main driver of stock gains since he won the presidency.

The Dow Jones Industrial Average .DJI rose 27.06 points, or 0.12 percent, to end at 21,892.43, the S&P 500 .SPX gained 11.29 points, or 0.46 percent, to 2,457.59 and the Nasdaq Composite .IXIC added 66.42 points, or 1.05 percent, to 6,368.31.

The Nasdaq closed within 1 percent of its record closing high set in late July.

Tensions between the United States and North Korea seemed to escalate after Trump dismissed any diplomatic negotiations via a tweet, saying “talking is not the answer,” a day after Pyongyang fired a ballistic missile that flew over Japan.

However, Defense Secretary Jim Mattis later said the United States still has diplomatic options.